Towards comparable poverty measures

What is the “right” poverty measure? Can we devise a universal poverty indicator to monitor the poverty aspect of Sustainable Development Goals (SDGs)? How to assess the closely related issues of inequality, vulnerability and social exclusion? What can be UNECE’s role in promoting comparability and the much-needed international guidance in this area?

To provide answers to these questions, UNECE held three events addressing the challenges of poverty measurement from 4 to 8 May. At the Seminar on poverty measurement, speakers from national statistical offices and other government agencies, representatives of the World Bank, Eurostat, UNDP and other international organizations, and leading researchers gathered to discuss national and international experiences with poverty assessment and the related methodological issues. A workshop addressed the challenges in Eastern Europe, the Caucasus and Central Asia and an expert task force embarked on the development of methodological guidelines.

Moving beyond the traditional measures of poverty

The conventional measures of monetary poverty relate to household per capita income or expenditure estimates. The internationally comparable absolute poverty lines, such as $1.25 or $2.50 per day, miss important information in national poverty patterns. As a result, countries often use their own national poverty lines set at different levels and updated at different times.

Many countries use relative poverty lines defined as a certain percentage of the median income in the country. This is the most frequently used measure in wealthier societies. However, at times of crisis, the change in the percentage of people living under such poverty line may appear counter-intuitive, because the median income to which the line relates may itself decrease significantly under such circumstances. Participants agreed that even among the traditional methods, no single approach is sufficient, if used as the sole criteria, in national and international poverty monitoring. The results from the different approaches thus have to be communicated clearly allowing correct interpretation of the different measures.

New developments in poverty measurement

Poverty is not only about money. Its multidimensional and subjective components are increasingly attracting attention. Today, the multidimensional character of poverty is broadly recognized – poor health, job insecurity, social exclusion, malnutrition and lack of personal security – are just some examples of other relevant aspects of poverty. But such risks also affect persons not considered as “poor” in mere monetary terms, in particular certain age or ethnic groups, isolated people, or persons with certain legal status.

Participants discussed how to capture all these dimensions in a meaningful and comparable way. They recognised the importance of the persons’ own subjective perceptions of their well-being, and provided examples of national determinants of subjective poverty and approaches to measure them. Furthermore, the participants shared examples of poverty estimates for specific minority or vulnerable groups and pointed out specific measurement issues.

Some of the challenges ahead include developing a coherent set of indicators to measure and monitor poverty, harmonizing definitions, communicating poverty to policymakers, progressing towards uniform national or international guidelines for the application of measurement methods and primary data sources. An expert task force is currently working on these issues. It will provide first results at the next UNECE Seminar on Poverty Measurement to be held in July 2016 in Geneva.